Medical Devices Sector Welcomes 100% FDI
New Delhi: Medical device makers on Wednesday welcomed the government's decision to allow up to 100 per cent foreign direct investment or FDI in the sector under automatic route, saying the move would boost technology inflow and manufacturing.
"This would bring technology to India and we need new technology to make the devices. This will also lead to co-investments in brownfield projects and import substitution," Poly Medicure managing director Himanshu Baid told PTI.
While welcoming the development, Association of Indian Medical Device Industry (AIMED) Forum coordinator Rajiv Nath, however, said the government needs to make domestic manufacturing more competitive against cheaper imports by hiking customs duty.
Unless the inverted import duty structure is corrected by raising import duty from 0 per cent to 10 per cent as earlier and re-imposing 4 per cent special additional duty, the shift from importing and trading by Indian investors and MNCs to manufacturing may not take place, he added.
Besides, appropriate regulations for medical devices independent of drug must also be in place, he said.
Mr Nath also cautioned that by making 100 per cent automatic approval for brown field investment, battered surviving Indian manufacturers would be easy picking for MNCs.
AIMED is an umbrella association of Indian manufacturers of medical devices.
In a move aimed at boosting the medical devices sector, the government earlier on Wednesday eased norms by carving it out from the policy that governs FDI in pharmaceuticals sector and allowed up to 100 per cent FDI under the automatic route.
"This move should give the medical devices industry much required impetus and capital to focus on capacity building and product development, and set the foundation for India to become a significant player in the global medical devices market just like pharmaceuticals," said Vrinda Mathur, director of tax and business consultancy firm, Grant Thornton India LLP.
